Changing International Tax Landscape
Posted: October 4, 2017
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Finance executives of U.S. multinational organizations (“MNEs”) should review how the interplay of the following initiatives can impact them: (i) Pending U.S. tax reform’s international proposals; (ii) the OECD’s BEPS initiative; and (iii) Brexit.
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1. How does the interplay of these three initiatives impact:
- Tax profile
- Treasury options
- Supply chain
- Corporate structure
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2. What areas should be vetted?
- Identify tax efficient repatriation options.
- Maximize foreign tax credits and after tax cash balances.
- Navigate the potential “one-time tax” on foreign earnings under certain U.S. tax reform proposals.
- Rework EU structures to mitigate IP, finance and supply chain challenges, as well as potential local exit and withholding taxes.
- Evaluate overall impact on tax and financial disclosures.
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3. What tax attributes should be reviewed?
- Locate sources and calculate earnings and profits (“E&P”).
- Calculate foreign tax pools.
- Analyze foreign subsidiary share basis and fair market value.
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4. What are the key areas of planning considerations?
- Holding company structures
- Intellectual property situs
- Tax attribute utilization
- Supply chain modification
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5. Next steps?
- Review common denominators to evaluate alternatives (i.e., assess inventory of cash, including “trapped” cash; firm up E&P and associated foreign tax pools; analyze share and asset tax basis).
- Reduce or harvest tax attributes as appropriate.
- Model practical options for repatriation of foreign earnings.
- Identify practical changes to the supply chain that balance the U.S. tax reform proposal’s potential territorial system implementation against the BEPS/EU/Brexit framework.
- Consider approaches to income tax filings and transfer pricing.
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For more information, please contact one of the following practice leaders:
Joe Calianno
Partner and International Tax Technical Practice Leader
National Tax Office |
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Monika Loving
Partner and International Tax Practice Leader
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